Looking for Trouble

27th September 2010

Why are we still prospecting for oil when we can’t afford to use existing reserves?

By George Monbiot. Published in the Guardian 27th September 2010

Forget, for a moment, the fragility of the Arctic environment and the likely consequences of a spill there. Forget the dangers of deepwater drilling in a strait plagued by storms and icebergs, and the difficulties –greater than in the Gulf of Mexico – of capping a leaking well there. There’s an even bigger question raised by a British company’s discovery of oil off the coast of Greenland(1). It’s the same question that’s invoked by the decision the British government is expected to make today (Tuesday): to allow exploration wells to be drilled in deep waters to the west of the Shetland islands(2). Why the heck are we prospecting for new oil anyway?

It’s not a difficult issue to grasp. If we burn just 60% of current global reserves of fossil fuels, we produce two degrees of warming(3). We cannot afford to use what has already been discovered, let alone to find more. Yet no one in either the current or past governments has been prepared to engage with it. Before the election, I confronted the environment spokesmen of the three major parties with this question(4). Only Ed Miliband seemed fully to grasp the point, but even he brushed it aside. The other two blustered and stumbled, while failing to resolve a fundamental contradiction in their manifestos: they were seeking simultaneously to reduce demand for fossil fuels and increase supply.

Before the election, the Conservatives promised to wean us off hydrocarbons – and to extract remaining oil reserves in the North Sea “to the fullest possible extent”(5). The LibDems made the same two promises, announcing that they would “secure the maximum long-term benefit to the UK economy of the remaining North Sea reserves.”(6) The new energy secretary, Chris Huhne, has repeated the pledge(7). The government has promised new tax breaks for oil companies working in UK waters in next year’s Finance Bill(8).

There are three possible ways of defending this contradiction. The first, as Ed Miliband did when I confronted him, is to argue that UK reserves are declining anyway, and if we restrained fossil fuel production here we would merely replace it by raising imports. The same argument could be made everywhere, with the result that no one budges. Only one country – Ecuador – currently intends not to exploit its oil(9). If the UK government is serious about preventing more than two degrees of warming, and seeks to avoid the charge of hypocrisy, the only consistent position is to stop prospecting and to decide which 40% of existing fossil fuel reserves should be left in the ground. Otherwise we leave other nations to make the hard choices we intend to duck.

The second is to argue, as the current government does, that new reserves will help to bridge the gap between old and new technologies: Lord make me chaste, but not yet. But it doesn’t matter how much renewable energy we produce: if we burn more than 60% of current fossil fuel reserves we get more than two degrees of warming. If we burn all of them and still look for more, we’ll get four, five or six degrees, regardless of our spending on nuclear power, wind or sunlight. You cannot stop climate breakdown only with investment. There needs to be disinvestment too. Developing new fossil fuel reserves also delays the transition to non-fossil energy, as it keeps the price of hydrocarbons down while ensuring that the value of green investments remains uncertain.

The third defence is to insist that the link between fossil fuel burning and global warming can be broken by means of carbon capture and storage (CCS): burying the emissions produced by power stations. In theory, and to some extent, it could. But the chances that large-scale CCS will happen are becoming more remote. A new study by the National Technical University of Athens suggests that the carbon price in Europe between now and 2030 is likely to remain so weak that the subsidies for CCS currently offered by European governments won’t be big enough to make it happen(10). As Chris Huhne observed last week, “there is no money left”(11). Pouring more state funds into a particularly expensive low-carbon technology isn’t an option.

Even if it were, CCS could do nothing to help reduce emissions from burning oil, almost all of which, in the UK, is used for transport and heating. There is no viable means of capturing carbon dioxide from these sources. We now obtain twice as much energy from oil in this country as we do from coal(12).

So how do we decide which 40% to leave in the ground? The answer is obvious: it should be those reserves whose exploitation is likely to cause the highest environmental and social impacts. That would rule out extraction in both the Arctic and the waters to the west of Shetland.

As I write, four Greenpeace campaigners are treading water in the open seas 100 miles off the Shetland islands(13). They are trying to prevent a drilling ship commissioned by Chevron from reaching its destination. Their case is sound. The West of Shetland task force, a federation of oil companies and government officials, classifies the area in which Chevron is trying to drill as an “extreme / hostile environment.”(14) The company intends to hunt for oil in 1570 metres of water(15) – roughly the depth at which the Deepwater Horizon was working – in an area of high winds and strong currents.

In June Chris Huhne claimed that “the impacts of the explosion on the Deepwater Horizon give us pause for thought, particularly given the beginning of exploration in deeper UK waters West of Shetland.”(16) The pause lasted for a millisecond. Even as he raised these concerns, his department was discussing tax breaks and exemptions with the companies hoping to work there. At a summit in Norway last week the UK government scuppered German proposals for an international review of deepwater drilling(17). BP is now lined up behind Chevron to prospect a region even harder to exploit safely than the deepwater fields in the Gulf of Mexico.

The government insists (I’m writing this on Monday afternoon) that it hasn’t yet decided whether to grant exploration licences for the seas to the west of Shetland. I suggested to its spokesperson that Chevron would not be spending its money and risking its reputation by dispatching an exploratory vessel to the drilling grounds unless it had received a pretty strong steer from the government that its application would be approved when it got there. “You could say that,” she replied(18). Since 2006, oil companies have been carving up this region with the government’s approval, in discussions to which we have not been party(19).

Preventing runaway climate change means getting out of fossil fuels. It means renouncing two fifths of existing reserves. It also means a global moratorium on prospecting, not just in deep water, but everywhere. If we can’t use it, we should stop looking for it.

“There could be 20 billion barrels of oil equivalent left to exploit but the UK competes against every other basin in the world for investment and I am committed to make sure that we have a licensing regime and investment environment that attracts quality companies and investment to fully exploit the remaining potential. We will work closely with the industry to ensure that we can achieve just that.”